Correlation Between Fidelity and Emclaire Financial

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Can any of the company-specific risk be diversified away by investing in both Fidelity and Emclaire Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Fidelity and Emclaire Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity DD Bancorp and Emclaire Financial Corp, you can compare the effects of market volatilities on Fidelity and Emclaire Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Fidelity with a short position of Emclaire Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity and Emclaire Financial.

Diversification Opportunities for Fidelity and Emclaire Financial

0.19
  Correlation Coefficient

Average diversification

The 3 months correlation between Fidelity and Emclaire is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity DD Bancorp and Emclaire Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emclaire Financial Corp and Fidelity is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Fidelity DD Bancorp are associated (or correlated) with Emclaire Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emclaire Financial Corp has no effect on the direction of Fidelity i.e., Fidelity and Emclaire Financial go up and down completely randomly.

Pair Corralation between Fidelity and Emclaire Financial

Given the investment horizon of 90 days Fidelity DD Bancorp is expected to generate 0.29 times more return on investment than Emclaire Financial. However, Fidelity DD Bancorp is 3.5 times less risky than Emclaire Financial. It trades about 0.03 of its potential returns per unit of risk. Emclaire Financial Corp is currently generating about -0.07 per unit of risk. If you would invest  3,991  in Fidelity DD Bancorp on December 30, 2023 and sell it today you would earn a total of  852.00  from holding Fidelity DD Bancorp or generate 21.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy39.68%
ValuesDaily Returns

Fidelity DD Bancorp  vs.  Emclaire Financial Corp

 Performance 
       Timeline  
Fidelity DD Bancorp 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Fidelity DD Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental drivers remain rather sound which may send shares a bit higher in April 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Emclaire Financial Corp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Emclaire Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Emclaire Financial is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Fidelity and Emclaire Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fidelity and Emclaire Financial

The main advantage of trading using opposite Fidelity and Emclaire Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity position performs unexpectedly, Emclaire Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Emclaire Financial will offset losses from the drop in Emclaire Financial's long position.
The idea behind Fidelity DD Bancorp and Emclaire Financial Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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